As we get closer to tax season, there’s a benefit that many taxpayers consistently miss out on.

I like to help my clients get every benefit from the government they can. That’s why I’m taking time to help you familiarize yourself with the tax advantages of the Saver’s Credit.

The real question may be: Are you even aware of this credit? Many people are not yet it provides money back into your pocket. Also known as the Retirement Savings Contributions Credit, The Saver’s Credit is designed to make it easier for low- to moderate-income taxpayers to save and invest for retirement.

In order to claim the tax credit, you simply need to be 18 years of age or older. Additionally you cannot be a full-time student nor can you be a dependent on someone else’s tax return. The credit is worth 10%, 20%, or 50% of your retirement plan contributions of up to $2,000 per year for singles or $4,000 for couples, depending on your adjusted gross income (AGI). Keep in mind this is an actual tax credit, not a deduction. So you get money back either in your refund or a separate payment that goes right in your pocket.

Here’s a list of some of the major types of retirement account types that qualify for the Saver’s Credit:

• 401(k) contributions (includes your Employer’s 401 (k))
• Traditional or Roth IRA contributions
• SIMPLE IRA
• SEP-IRA
• 403(b) or governmental 457(B) plans

For the 2016 tax year, here are the Adjusted Gross Income thresholds for each tax filing status, and the credit rate you can expect to receive:

Source: IRS

An Example of How Much You Could Get Back

Let’s take an example to illustrate how much someone could get back if you’re married and earned $40,000 from your job in 2016. Let’s say that your spouse didn’t have an income. And for purposes of this example, we’ll say that you contributed a total of $3,000 to IRAs for you and your spouse, making your AGI for the year $37,000. This entitles you to a credit of 50% of your contribution, which translates into $1,500 back in your pocket. This couple would literally be given $1,500 from the government as a reward for saving and investing for retirement.

When The Government Offers to Give You Free Money, Take Advantage

If you fall within one of the income brackets in the table above and haven’t saved as much for retirement as you’d like, this could be the extra incentive you need. The government is offering you an instant 10%, 20%, or 50% return on your investment, as well as an opportunity to set yourself up for financial freedom later in life, so take advantage.

Think About the Long-term Benefits

Let’s play out the scenario of our married couple long-term. We’ll say this married couple contributes $3,000 to their IRAs every year for 30 years. This is a total contribution of $90,000 over three decades. Now, pay attention: Since they have received a $1,500 tax credit each year, they effectively only contributed $45,000!

If we use a conservative average return rate of 7% (well below the stock market’s historic average), this couple’s IRAs could be worth more than $283,000 after 30 years, a $237,000 profit on their investments. That’s why this credit is so important to take advantage of. I look forward to helping taxpayers take advantage of the Saver’s Credit and pocket more money instead of paying more to the taxman.